App Developers in Google have a variety of ways for generating revenue for the Search Giant. While Google is popularly known for generating most part of the revenue from Advertising, its other sources of income include the high velocity of revenue generated by the App developers. Google Play Store is a hub of revenue generation in which lots of sales such as movie sales, music sales, book sales, game sales, app sales etc. go on throughout the year and the Google App Developers are prioritized due to their variety in revenue generation.
Now you might think, what’s the variety! In fact, the App developers sale apps directly under a quoted price, or use Advertising technique in an App to generate revenue or offer a service through an app on a weekly, monthly or yearly subscription basis. For every single app they sale via Google Play, Google keeps 30% of the cost towards transaction fee and pay the developers 70%. The same funda is also applied for the subscription based services. But what we said earlier that Google aims at paying 85% of the App subscription payments to Developers is just a competitive approach towards Apple.
Actually, Apple just recently announced that it’s going to reduce the transaction fee on subscriptions to 15% and that’s what made Google think on this suit. But what Google plans is somehow much distinct in nature. As per Apple’s new policy, if a Developer becomes able to keep a subscriber over a year, then the revenue ratio will be changed from 70:30 to 85:15. But here what Google plans is that it will change the pay module instantly to 85:15 as soon a subscriber subscribes to an app at the Google Play store. That means to get the which benefit, Developers and service providers at Apple will wait for a year, they at Android will get it instantly. Isn’t it terrific?
However, Google has already started testing this new split with some of its content providers who sell content via Play Movies & TV. But we are not aware when Google is going to bring this plan into force as Apple has already announced to make it effective from June 13, 2016. But we can assume that soon Google will also roll out this opportunity for its developers. But one thing I must mention here that the new pricing structure will have no impact on indie developers or on the big game studios. It’s so because transaction fee for the sale of these apps will remain the same i.e. 70:30.
But we need to see how Apple reacts on this new profit plan of Google for the Android developers. What you think guys? How will Apple react?